My Affair with Easy Money

Ever since I was a kid, I’ve been fascinated with the opportunities for easy money. My first income was earned by siphoning matchboxes from my house, taking them to the grocery store and asking for a refund, telling him that these don’t work. I got 25 paise for each matchbox I gave him and in a course of 3 days, I’d earned 1.50 rupees. I happily spent the money as soon as I earned it, sitting in a merry go round, enjoying the fruits of my labor. Of course, when my mom found out, there was no pocket money for me for a month. This, I now realize, was the start of my affair with Easy Money (We should call it EM for the sake of some romanticism). EM has flirted a lot with me, but at the end, she’s always been hard to get. She comes really closes, even spends some time with me, enticing me to the possibilities and then leaves me high and dry to nurse my wounds. Sounds confusing? I’ll explain what I mean.LottreysWhen I was growing up, I was fascinated by all things involving a game of chance. Gambling with marbles, snakes and ladders and so on but was never interested in skill games – say carom, chess (coz. I always lost to my brother there). In my early teens, I started investing in lottery’s; One ticket cost Rs.2 and you get Rs. 17 if the last digit matches the lucky number. I thought I was smart so I bought 4 different numbers every day, thereby increasing the probabilities though diminishing the rewards. Again, I made a grand start getting the lucky number the first four days on a row but thereafter, it really got frustrating and my winnings dropped down to once a week and then once in a blue moon.

StocksI at that time frustrated with the result, decided I’d had enough of taking chances. During those days, the stock markets were gradually becoming the talk of the common people. Slowly and gradually, stocks started drawing more and more admirers. Harshad Mehta was slowly forgotten. Share price conversations, which used to be the exclusive talk of high society dinners and premium clubs, started happening at the corner tea stall. Gamblers started betting legally on stocks with rich dividends. Everything was beginning to look up and I thought, well this is where I make money using my mind. This isn’t a game of chance so I might just as well be good at it. I was confident because I had always been excellent with numbers. What exactly lead me to believe that stocks are a math problem, I still can’t fathom.

I bought Reliance Industries at 156 for each share and was ecstatic when it touched 200 within a month. I tried calling my broker to sell the shares but no response. The news was that he went bankrupt and with him went all my shares since he hadn’t given me the certificates yet. My first investment in shares had ended on a sour note. EM had promised to meet me for dinner and at the end, she didn’t show up and I had to foot the bill without enjoying the date.

StocksMy next encounter with the ever-gorgeous stock market happened in the year 2003. There happened to be a friend who opened an office where you could trade on shares daily without any investment but you needed to settle at the end of the week. The game was dangerous but the movement in the sensex those days was not more than 100 or 200 points either side. This, I thought was fairly predictable. If on Monday and Tuesday, the sensex advanced, it has to fall a little on Wednesday or Thursday. I was proven right when in the first two weeks, I made 4,500 rupees. As always, easily made money gets spent easily and I went to Mount Abu for 2 days with my wife. EM had finally come to me, I thought. To compensate for the failed dinner date, she had spent a wonderful two full days with me on a hill station.

I became an addict for the next two weeks, calling this guy every half an hour, subscribing to mobile update services, watching only Zee Business on the TV and jotting down every big movement of shares in my dairy. I no longer saw the price of the share but only the movement of it in a day. And then again, as you would’ve guessed, the inevitable happened. To cut a long story short, a week of mayhem followed and I was down by 16,000 and I had to pay. Instead of EM, it was the recovery guy calling and telling me to pay within a day or face the consequences. That was it. I had it. No more flirting with danger, I decided. I borrowed from my dad, made the payment and started repaying my dad month by month.

UAE StocksAll went well as long as I avoided EM and lived off Hard earned money (HEM). But EM, like every pretty woman loved to have many admirers. The UAE stock markets dived and experience had taught me that whatever goes down has to come up, sooner or later. I collected money from family and friends as subscriptions and invested in the UAE Markets running my own Mutual Fund, though without any fee. Just like the story of my life, the markets looked up for a few months but not for very long and then sank further.

More StocksCome 2007, I was doing OK with HEM, was a silent spectator to the Sensex’s journey from 6,000 to 20,000 and was looking at EM having a good time with almost all of my friends. I audited mutual funds, discussed performance with fund managers but never invested in shares while my friends envied my position where they thought I had all the information to make an informed decision. I used to tell my friends that Thank me, I’m not in the markets or else this bull run wouldn’t have lasted. I became a bad luck charm and my brother stopped investing wherever I put my money.

Our honorable finance minister one fine day decided, enough with the bulls. He said, no more foreign investors investing through P-Notes. The market tanked 3000 points to 17000. Previous experience told me, there was never a better time to buy. EM invited and I jumped on the train. This time I was determined to wine and dine EM. Everyone was talking about BRIC and the India story. How could everyone be so wrong? It was the time to reverse the curse.

The market gave a 21k salute and I was sitting on a 15% return in 3 months. That is an annual return of 60% and I was again delighted. Scared to kill the golden egg laying chicken I held on my shares for some more time and then 21 January happened. I invested some more money in the hope of averaging and making more money on a rise but the rise never came. The market made newer lows every month and on every low, I pushed in more funds. I couldn’t believe seeing my story repeat itself and that too in such a ghastly manner. I had managed to reverse the world trend instead of reversing my curse. My passion for EM had caused the financial world to collapse.

Financial wizards, IMF, governments of the super powers, all of them are left wondering, ‘what happened;’ blaming this situation on one thing or another and I can’t help but smile sitting on my laptop buying some more stock.

Disclosures:I am currently invested in Gold, Stocks and Real Estate. If all of you wish to see the markets look up, send me money that I’ve lost and I’ll gladly exit all my investments. I should however, be allowed to place my money in fixed deposits at least. I then take no guarantee for interest rates.